African retail group Pepkor makes strategic purchase of Choice Clothing

Pepkor is listed on the Johannesburg Stock Exchange (JSE) and operates in various African countries, as well as in Brazil. Its other retail brands include Shoe City, Tekkie Town, Bradlows and Incredible Connection. 

The acquisition marks a significant step in Pepkor’s strategy to boost its presence in the adult wear market, where its market share is low. The group’s clothing-related brands have traditionally enjoyed strong market share in baby wear and children’s wear. 

Choice Clothing is a cash-based retailer that has 80-plus outlets in South Africa, as well as around 20 stores in Namibia that trade under the Big Daddy brand. 

A high-growth market segment 

“[It] is positioned at the bottom end of the discount market, a high-growth segment that bridges the gap between the formal discount and informal markets,” a press statement reads. 

“The Choice Clothing business is scalable with expansion potential as it benefits from Pepkor’s scale and core competencies in merchandise, sourcing, supply chain, distribution, and properties.” 

Sean Cardinaal, the Chief Operating Officer of Pepkor, says the acquisition of Choice Clothing represents an exciting opportunity for Pepkor to reach even more customers in the discount and informal space.  

“While the Choice business may be small in comparison to other Pepkor businesses, this is a business which we can grow aggressively by leveraging our scale and capability to potentially triple the retail footprint in the medium term,” he states. 

The acquisition is still subject to regulatory approvals.